but the bottom line is we did not cost out, we did not get specifics on those services is that would be provided. supervisor mirkarimi: so i will conclude on this remark and give it to my colleagues. i do not think that there is anybody in this city government that wants to see twitter league san francisco -- leave san francisco. i do not. and not to see them stay and flourish. my interests in this conversation is how thorough and comprehensive analysis is. the self-evident reason of trying to retain twitter and be kind of fancy with our strategy legislatively to encompass all larger orbits around twitter --

in compass a larger orbit -- encompass a larger orbit. answering questions we have not been able to answer. i feel this discussion is slightly premature, if we move into a vote in areas where i do not feel we have a full understanding of what it means, not just in trying to secure twitter's retention but also about the unintentional consequences of other companies, you know, i think for a probably accurate depiction note, who also threatened the same exit. accurate depiction -- i think for a probably accurate depiction, who also threaten the

same exit. as to what the excess costs are going to be on public safety and other areas. this area, mid market, i do think does require the city's love and attention where it has not before, and i think it is nice if we are able to stimulate a public-private relationship that will be able to answer that larger call. if this is an attempt to do this, then, i think, in part, i am hearing some justification, but not in a way that i think it seals the deal for me, and i think it is incumbent on the city to answer those questions, which have not been answered yet, so that is where i am in this conversation. i want to thank supervisor kim and others for helping us at least peel back some of the larger concerns, and some of those concerns are class issues. there will be an inevitable

situation with class issues in an area that has been well stratified between those having a hard time being able to stay in san francisco or cannot leave because they have nowhere to go versus those who want to make san francisco their home and make it attractive enough where we may not see the validity or incentive of trying to keep that melting pot of class, so i think that this issue does stimulate that debate, that discussion. i do not think there has been a clear answer that has been offered here in how to make this happen, but as far as what we are expecting -- discussing today, i do not think this will be the last time we are discussing it. thank you. .chair chu: -- chair chu: thank you, supervisor mirkarimi. i think there are some comments that supervisor kim wants to

make. i would like to clarify that this is about the buildings, saying that the buildings that we believe will be able to continue to receive tenants, we are going to exempt those buildings from being able to take a bandage of the tax exclusion, so the action would -- to take the advantage of the tax exclusion. correct? ok. supervisor kim? supervisor kim: my apologies. so at this time, i want to take and time -- take some time. i have been in conversations, so there is some time for the board to consider these amendments. i would like to and corporate the amendments that were submitted by our budget analyst

that clarified language to ensured that we are giving a tax exemptions for net new jobs in san francisco -- to ensure the we are giving tax exemptions -- that we are giving tax exemptions. one is to take up the language, the 90% employees -- take out the language. and the second is to amend some of the language, to clarify a base tax year. and to clarify for members of the public, if you're a company that comes in from outside of san francisco, you are a technical creating net new jobs in san francisco. however, you do not get a net tax break for those jobs. you will get an exemption for the next year for net new jobs after you move into san francisco. the other amendment, the one i listed, was actually reducing

the size of the zone to target specifically buildings that have had trouble attracting tenants, and that have had high vacancy rates, taking up the block blocks, as suggested by the comptroller's office, that has historically low rates. work force hiring and work force development affidavits. affirming that they continue to meet the eligibility criteria as determined by the office of economic and work force development. the annual affidavit would detail the total number of individuals hired, the total number of individuals referred by the san francisco work force the balance system, -- the work force development system. on or before january 31 on each year subsequent to the initial approval of the application. in addition, as mentioned,

exceeding $1 million, they shall enter into a binding agreement in order to be eligible for the payroll tax exclusion under the section. it may include commitments to engage in committee activities in the central market and tenderloin area and to participate in opportunities. currently, there are negotiations with twitter to put together a benefits agreement. investing in the neighborhood, either committing to schools, committing to work force development, committing to local purchasing to support businesses in the area, some of the ideas that we have had. they shall submit a report for

what is authorized in this section for any agreements that have been entered into during that year with them. president chu, i know that you potentially want to split the file and have a second. chair chu: thank you, supervisor kim. president chiu? president chiu: there are some that will likely be taken very soon, so i think there is a question of whether they should be exempted in or out of the legislation. if we accept the amendments that supervisor kim has proposed, and

we want to have a change next week to have these buildings continue to be subject to the exemption, would that be a non substantive amendment next week that we could make that committee? to keep our options to preserve it in case you want to move this out of committee next week? >> through the chair, deputy city attorney. if it is to exclude more benefits from receiving the tax credits, that would not be a substantive amendment because they are already not intro to that tax credit, so you can delete out other additional buildings dot -- because they are already not allowed to that tax credit, so you can delete out other additional buildings. president chiu: ok, let me state

this differently. it could go to the full board next week, but if she were to do it next week, and we wanted to reverse it, we cannot do that? >> if you wanted to put the same buildings back in that have received it, for the public hearing today, that would be fine. if he were to add something that has not been ever in the document -- if he were to add something, then that would require new public comet -- if you were to add something, then that would require new public comment. now, a supervisor -- now, supervisor kim -- that would be ok because you have still had a public hearing today on the original idea. president chiu: ok, we could do

that next week if we wanted to put something back? >> you could do that next week without requiring any further public comment. supervisor kim: even if we were to reverse some of the excluded buildings, that would not cause a continuation? >> that is correct. chair chu: ok, i believe we have a motion for a supervisor kim, and i believe the budget analyst's recommendations are included. supervisor kim: that is correct. chair chu: should we take that as a whole? we take it without objection. [gavel] it has changed, so do we have a motion? supervisor kim: i know that many

members of the public are not here, but i wanted to address some of the concerns. about the general fund. i am still of the prospective that this is a usual cost to the general fund and if anything will bring in increased revenues to the city, especially with the amendments we have put forward, in terms of payroll tax, property tax, and sales tax. i also think this is a huge boon to many of our businesses that are struggling in this area -- a huge boom to many of our businesses. many are looking for support. i think it is really important for us as a city to look out for small businesses and support them. they create about 70% of the jobs in san francisco, and they hire locally, and they tend to hire in the neighborhood.

an exclusion that we will have to start offering it to everyone, i just want to be specific at this is a geographically targeted item. a business that has an infrastructure to support it, that has 18 muni linees. whether it is slow or not, it does have that infrastructure there. it is really important that we also state that we are giving this exclusion for net new jobs, again, for the city, not as with other enterprise tax exemptions. our office also recognizes that tax exemptions typically do not work for creating jobs. we, again, have tried to make this legislation as efficient and as targeted in as short as possible in order to see the outcome as we want to see, which is dropped growths -- which is

job growth and revitalization in the area. this is something we have been asked for for many, many years. our office is very concerned about transportation. we realize that gentrification is something that has been happening in the city of san francisco for a very long time, way before this legislation was put in place, and i, myself, was an organizer. i have been trying to fight gentrification. low and middle-income housing in san francisco. i do not want to do it by not creating jobs or by maintaining blight in the market. what controls, whether in the tenderloin or another area, to

protect low-income and middle- income housing -- i do want to thank my colleagues for their time. is an issue that has fired up a lot of passions -- this is an issue that has fired up a lot of passions and opinions. i think most of us agree on the outcomes we want to see but may disagree on the tools that will take us there and what potential outcomes might be, but i do appreciate my colleagues, and the members of the cali -- members of the public that came out today. chair chu: thank you. supervisor chiu, did you want to say anything? supervisor chiu: i am not going to vote on this because i am not a member of the subcommittee. for me, the status quo is not acceptable. unemployment is not acceptable. blight is not acceptable.

and for my perspective, i think we are a city that celebrates our shared progressive values, and this legislation is about progress. it is about progress to stand up for jobs, to stand for development, urban vitality. i am very pleased that this is a policy that is targeted, and i think contrary to a number of statements today, this will lead to, as our comptroller estimated, likely several millions of dollars of new payroll taxes every years, and i think for all of those reasons, it is important for us to support this, and i want to thank all of the members of the community who have weighed in on this. i want to thank my colleagues for considering this today. chair chu: thank you, president chiu? do we have a motion to continue

this for one week? ok, next week. [gavel] ok, so we are going to take a 15-minute supervisor chu: welcome back to the budget and finance subcommittee. we left off at items four and five. please call items four and five -- actually, just four for now. >> hearing to review the final host city agreement negotiated by the city for consistency with the board's prior approval of said agreement, review of the court plans for tenant relocation and current status of available for properties from a briefing by office of economic and workforce development regarding the implementation plans, and review of stakeholder out beach plan and scoping of

the eir required under ceqa. would you like me to read item 5? supervisor chu: just item four for now. this item has been brought to us by supervisor mirkarimi. would you like to make some opening comments? supervisor mirkarimi: sure, thank you. i had requested well over a month ago that the budget analyst follow-through in providing an analysis of any modifications and changes to the proposal, to the deal that has been ratified by the board of supervisors of december 14. we all very enthusiastically unanimously had supported the deal december 14 and was aware that there had been some modifications by city negotiators in order to meet the demands of bmw oracle by the

event authority, by december 31. up until that point, there had been a number of meetings, a series of meetings and the minister by us here at the board of supervisors and the budget committee that really helped watchdog and spotlight the evolving discussion of what our city position was going to be in securing the right to host america's cup. i was one of its earliest supporters in trying to rally the city family from the board in recognizing, i think, the benefits of us pursuing the america's cup vigorously and proud of the fact that we were able to do so collectively. i also made it clear that in the course of that pursuit, that this be a deal unlike any other for san francisco city and county and, frankly, for the bay area because of our leadership in pursuing this deal, that we

are obligated in making sure that process and the governance of how this deal is to be transacted is really beyond approach in its integrity and the fact that transparency and the integrity of that transparency would always remain intact. so i think it is only fitting that because of changes that occurred between december 15 and 31st, the public has yet to benefit from a full understanding as to what the gains, the losses, the liabilities or obligations are potentially of any of those alterations of the original deal. i thank the budget analyst and his staff for working diligently to provide us with what has obviously been some eye-

catching information. there had been in my reading of the material some substantial changes, but i think there is good answers waiting for us by the port authority and the negotiators as to either justification or approach for why some of those changes were made. that is the discussion we are going to have here today. in essence, the budget analyst office has already spoken, by the report that has been published, so what i'm going to ask is that we have for authority city's fee to the issues that i think stand out the most by the budget analyst, and that raises potentially some concerns or eyebrows about exactly the impact of any of those deals changes and to the benefit or loss of the city. i really do hope, to be honest with you, that our ability to host the cup remains uninterrupted. i do realize that there are other milestones in this

process, like the dda requiring approval, and other leverage points that fortified the board of supervisors' oversight in this particular deal, but why wait months down the road when, obviously, with information before us right now reflected of that two weeks before the deal had changed, do we let this opportunity go by, not fully understanding with the realm of its impacts are? consistent with where we started, let's continue to move down this path, and i look forward to the discussion i have facilitated here today. supervisor chu: 90. i want to take a brief moment to recognize supervisor campos, who has joined us for this committee -- thank you. supervisor chiu: i wanted bank supervisor mirkarimi -- thank supervisor mirkarimi for proposing this hearing today.

for ensuring that what we voted on in the middle of september remains essentially the same. i know there have been a lot of questions raised, and i want to thank the different parties that have been putting together some of the answers. i look forward to hearing fuller exposition on that today. the one thing i want to add as this is the first public conversation we have had about the america's cup here at the board since the discussion we had in december, and it is my hope this is the first of a number of public conversations we're going to have. i know that during the public hearings we had, the city and america's cup organizers had committed that there would be very explicit conversations with various community stakeholders around transit issues, a round congestion, are around how the america's cup with literally and physically be implemented next year and in 2013. i very much support and encourage as many of those

conversations as we can have. this is just the beginning of the conversation, but i have many neighborhood associations, merchants, and residents in my district and i know throughout the city that have questions and concerns, and i look forward to those concerns being vetted and dealt with in due course so that when the big event comes, we will be ready as a city to welcome the entire world to it. my apologies -- because of the link of the prior items on twitter, i unfortunately have to go, but i know we are in very good hands with all our colleagues who are here to discuss this, and i look forward to further conversation about it. supervisor chu: thank you. supervisor campos. supervisor campos: thank you all for being here. i look forward to presentations by staff. let me begin by underscoring what i think every supervisor who has looked at the issue of the america's cup has said, which is that we want to be supportive of this event

happening in san francisco. the board unanimously voted upon that, and this is about effectuating the agreement that was approved by the board of supervisors. as a matter of law, the authority to approve this kind of a deal rests with the elected government of the city and county of san francisco, and that authority remains with them unless there is a clear delegation of that authority. the resolution that was passed by the board of supervisors makes it clear that even though we recognize that there will be additional changes that would be made, the resolution makes it clear that the steps that are to be taken by staff have to be consistent with the agreement that was approved by the board, said the issue of consistency is an overarching one, and i want to make sure that the additional amendments and changes that were made were consistent not only with the letter, but also with

the spirit of what was approved. likewise, the san francisco administrative code chapter 29 requires that the board of supervisors make certain findings with respect to this type of a deal. i can tell you that the findings that i may, that i voted upon were based upon the agreement that was before us. so if there is a material change to that agreement, depending upon what that change is, maybe those findings would not have been made. so the question of how material the change is is really a key one. again, the question is not necessarily go to the larger issue of whether or not the america's cup should be held in san francisco, but whether or not further board of supervisors approval is needed. on the issue of -- and by the way, something else that is important to recognize about this resolution that was approved is the there are other elements that have to be met.

the delegation of authority with respect to the negotiation of amendments makes it very clear that those amendments have to be made in consultation with the city attorney, and there has to be a determination that they are in fact in the best interests of the city, that those changes do not materially increase the obligations or liabilities, and third, that the changes effectuate the purpose and intent of the underlying agreement. those are the questions that i will be asking. whether or not the amendments that were made as described by the resolution were actually made in the best interests of the city, they do not materially increase the obligations or liabilities of the city, and they indeed effectuate the purpose and intent of what the board voted upon. legally, the definition of what is material is clear -- material

is defined as important. it also is defined as affecting the merits of a case, for causing of the jugular course of action. the words significant and substantial would also come into play. as we look at these changes, we have to analyze from our perspective whether or not the changes that were made affect the merits of the underlying agreement, whether or not they are important to the underlying agreement, and whether or not they are significant or substantial. the devil is in the details with respect to those, so i look forward to hearing from staff. thank you. supervisor chu: thank you very much. supervisor, did you want to add something? supervisor mirkarimi: as we lead into the hearing, i am going to ask the budget analyst to stimulate discussion naturally by the report they have published to listen to the points that i expect the city

staff will be speaking to in either agreeing, disagreeing, or finding some denominator of agreement with the budget analyst. i would like to help arm hire, for lack of a better phrase, where there might be some disagreement in the analysis -- i would like to help umpire. the analysis should be clear, and that as we walk away with a greater level of specificity as to the benefits and the obligations and any loss that i think was a known or either not made as clear in the past, so i'm going to come back to the budget analyst last in the structure, and related to what has also been mentioned, maybe speak with the city attorney about the question of either in an itemized way or in an aggregate way, how material changes potentially